Typically, a closing for vacant land will cost a buyer between $500-$700. This includes the costs for a title search, title insurance, the title company’s fees, county document recording fees, and sometimes state transfer taxes.
We will recommend a local title company for the closing, which in most cases, is the same title company that we used when we purchased it. We pick title companies based on cost, how fast they can close a deal, and how pleasant they are to work with. However, if you have a company that you’d like to work with then we’re happy to deal with them.
Below is a breakdown of the actual closing costs for a Florida property that sold for $5,869.
Fee to title company: $300
Title search: $85
Title Insurance: $100
County recording fee: $18.50
State doc stamp: $41.30
Electronic recording fee: $4.50
Total: $549.30
Title Company Fees
These are the fees the title company charges to do business. It includes the company’s cost of doing business like salaries and overhead. But it also includes the cost to escrow the funds and costs to overnight packages to out of state buyers and sellers.
Title Search
The title company searches the county records for all of the documents associated with the property and all of the documents connected to the previous owners. They look for a clean chain of title, and any outstanding liens or encumbrances on the property like mortgages or lawsuits.
Title Insurance
Title insurance protects you as the buyer from any title defects that come up after you purchase the property. Sometimes title companies miss things during the title search. It’s very rare, but it happens. Title insurance covers the cost to fix the title and clear any defects. The insurance is optional in many cases, but if you ever plan to build something on the property, the you should definitely purchase title insurance.
County Recording Fees
These fees are paid to the county clerk for recording the deed. They are generally a very small part of the closing costs.
State Doc Stamp
Some states charge a transfer tax, or a doc stamp fee, based on the sale price of the property. Florida for example, charges 70 cents on each $100 of the sale price (a $10,000 sale is taxed $70.)
Electronic Recording Fees
Deeds are recorded at the county courthouse and many counties now have an online portal where the documents can be uploaded. This is typically a very small fee.
